IMF blames policy makers for Nigeria’s stunted growth

IMF blames policy makers for Nigeria's stunted growth

Barely a week after the International Monetary Fund (IMF) predicted Nigeria’s exit from  recession in 2017, it has idendified fresh huddles that could make the envisioned recovery impossible.
Some of the debilitating factors, according to the fund included inconsistencies, which it noticed in the policy direction of government, especial on the foreign exchange management and lack of attraction of foreign investments.
To the fund, they all border on investment and lack of clear cut programmes aimed at supporting micro economic growth.
In its podition paper on review of micro and macro economic advancement in selected emerging economies, of which Nigeria and other African countries featured, sighted by Ripples Nigeria on Friday, more than 56 per cent of low-income earners in the countries were being given priority attention, whereas Nigeria’s case is different.
It cites various cases of domestic policy failures, including delayed, or poorly managed policy adjustment to lower commodity prices in Nigeria as a case study.
The report reads: “In Nigeria, foreign exchange rationing has adversely affected debt service capacity of many corporates, with lack of business confidence and delay in policy adjustment by Nigeria’s leadership have continued to play some negative roles here.”
The fund decried continuous rise in both interest and inflation rates, said to be caused by challenges of foreign exchange, some other countries have found solution to the same saga.
Comparing Nigeria with other African economies, the fund stated: “There were sharp movements in currencies across many developing economies, including Mongolia, Mozambique and Zambia where reserve levels have been significantly eroded, but in Nigeria, poor support to the naira, through foreign exchange rationing, have failed to yield results “
However, the fund added that Nigeria’s economic problems have also affected neighbouring countries, adding that its external developments have predictably played an important role in the emergence of financial sector stress, through falling commodity prices, declining remittances, and adverse spillovers from neighbours.
But an economist, Henry Moyo said the IMF earlier statement on Nigerian exit from recession in 2017 was not inconsistent with its present position paper.
According to him, “The fund gave the prediction with a proviso, which is that the right policies must be put in place for the prediction to become real.”
Also, IMF had said Nigeria still has hope of revamping its economy if it could urgently carry the following reforms: build large foreign reserve, reassess its on exports and a strong broad based domestic tax system .

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